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Will the Sugar Tax improve the Health of the UK?
In The UK, petrol is £1.10 per litre and about 70% of that is tax.
Cigarettes cost £8-£9 per pack, and 70-80% of that is tax.
Beer costs just over £3 a pint on average, and around 33% of that is tax.
So, here we have three examples of heavily taxed and relatively expensive goods, yet do we drive less, drink less or smoke less as a nation? No.
If the government (yet again) increased taxes on tobacco, fuel or alcohol, would we then suddenly cut our consumption?
No, of course not.
These goods are effectively ‘inelastic’ in their demand. To explain that a little further, under normal market conditions when prices rise, demand drops. Then, prices are cut and demand picks up until we reach an equilibrium of supply and demand over time, or a ‘fair’ price.
With inelastic goods, this doesn’t happen. An inelastic good is one for which demand is (within reason) unaffected by price. Good examples are gas and electricity, as even in the deepest of recessions, we still need to heat our homes and use electricity. We would ultimately have to spend less on other things if we had to, to have this basic standard of living.
In my opinion, goods like tobacco and alcohol may be EVEN more inelastic than gas and electricity. Sadly, it is distinctly possible that some people, even in winter, may buy alcohol and cigarettes before topping up their electricity or gas meters. Taxing these goods more has not, and will not stop this from happening.
So, why am I even talking about this?
Well, Albert Einstein’s much quoted definition of insanity is “doing the same thing time and time again and expecting different results”. And that is exactly what the sugar tax is.
We know that raising taxes on tocacco, alcohol and petrol don’t really cut demand, it just makes more money for the government. Taxing junk food or sugar will have the same outcome.
In addition, we already know that the above inelastic goods are relatively more expensive for lower income individuals and families, and food is the same, therefore on top of being pointless, it is yet another unwelcome regressive tax (a tax that proportionally affects lower income citizens more than those on higher incomes).
So why, with this knowledge and experience, is this new tax being discussed as though it were some sort of genius solution to the obesity crisis?
People have habitually consumed sugar and junk food for decades. This tax will quite simply be ineffective in improving the health of our nation.
First applying it in hospitals is a nice PR idea, but it is ridiculous to the core. Junk food consumption inside hospital cafes, whilst somewhat ironic, is completely insignificant compared total national consumption, so cannot be in any way responsible for the national rise in diet induced obesity, type 2 diabetes and heart disease levels.
The only real beneficiary of the sugar tax will be the Treasury, because no one who is habitually consuming chocolate or other sugary rubbish is going to stop for the sake of a bit of extra cash.
There is only one way these health issues will be solved and that is by education.
Education is far cheaper and more effective than either taxing the poorer in society, or offering more bariatric surgery or other very expensive and symptom focused weight loss treatments that the NHS insist upon.
When this tax experiment spectacularly fails, it will have wasted hundreds of hours of parliament time and millions of pounds of government resources to implement and manage. Yes, it may actually have made money for the Treasury in the end, but that was hardly the point (at least I hope not).
Obesity, type 2 diabetes and heart disease levels will continue to rise, until the educators waiting patiently in the wings, already adding real value to their audiences and changing lives, get the central support and resources needed to make a bigger and wider reaching change to the health of the country.